Supply chain is an industry which is becoming more complex and interconnected. As a result, businesses must take action to tackle the increasing number of factors influencing their operation. Data driven insights can help companies deal with disruption, provide visibility on supplier performance and manage inventory levels, to name a few examples. A study showed that a major fashion retailer increased its market share by 28% by digitalising it’s supply chain. We’re going to take to take a look at some of the ways supply chain is benefiting from using data.
Forecasting and Inventory Optimisation
A key consideration for supply chain companies is to ensure they stay in an optimal range of inventory, overstocking can cause increased costs, understocking results in missed revenue. Therefore, knowing the optimal stock level and the factors which drive that is crucial to succeed.
Demand forecasting modelling can be produced using data from a variety of sources such as historical sales, economic indicators, supplier availability etc. A demand forecast model takes into account all the factors fed into it and gives an accurate estimation of the level of stock required to meet the demand expected. Modelling in this way provides the tools to allow business to understand more on how to run their operation with maximum efficiency.
Real-Time Visibility of the Operation
Setting up a real-time data feed for a supply chain company provides oversight on what is happening and give the ability to adapt to any disruptions. An operation as complex as supply chain has an uncontrollable number of factors that can disrupt or change the plan at a moments notice. Hence, it’s crucial to have the information of what is going on in real-time to provide the ability to adapt to the circumstances as they happen.
Predictive Analysis for Disruption
As mentioned above, having a real-time feed to show what is going on in the supply chain is a priceless tool for a lot of companies. This real-time feed can be used in tandem with predictive analysis on a number of different situations to know how to react when a scenario has been detected.
Predictive analysis gives you the opportunity to anticipate disruptions and what the best course of action is to rectify it. Using historical data along with a variety of external factors such as weather forecasts, market trends or even political indicators can predict the likelihood of a disruption and give you the ability to plan how to react.
Conclusion
In an increasingly volatile global environment, disruption and complications are unavoidable for supply chain companies. The only way to flourish under these conditions is to have all the tools required at your disposal. That starts with understanding your operation and how you need to adapt to ever changing conditions. Leveraging a robust data strategy to gain this advantage is the only way to succeed